BATTLE LINES have been drawn between the Conservatives and Liberal Democrats over the abolition of the 50p tax rate.
Liberal Democrat Treasury minister Danny Alexander has labelled Lord Lamont and other Conservative members as living in “cloud cuckoo land”, because they are calling for the removal of the 50p tax rate.
Both the Treasury minister and business secretary Vince Cable said it would be wrong to focus tax cuts on the rich, The Guardian reports.
“The idea that we’re going to somehow shift our focus to the wealthiest in the country at a time when everyone’s under pressure is just in cloud cuckoo land,” said Alexander.
One of the coalition agreements was to prioritise tax reductions for those on low and middle incomes according to Alexander.
Lamont has called for the removal of the rate as he believes it makes the UK uncompetitive compared to other European countries.
“The 50% higher rate of income tax is probably one tax which could be abolished without any effect on revenue,” he said in a recent interview.
Chancellor George Osborne has requested HM Revenue & Customs calculate the amount of revenue generated from the 50p tax rate.
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